Estimating the Economies of Scale and Scope of Iranian Public Universities

This study attempts to analyze the economies of scale and scope of Iranian public universities through estimating the cost function of 75 public universities. For this purpose, the quadratic cost function form is used to estimate the cost function of universities. Furthermore, the research model is estimated by using the panel data technique. The results show that there are no general and specific economies of scale in the studied universities. Moreover, there is a significant gap in the average scale of the studied universities with respect to a desirable economic scale. The economic scale of the universities is different in different degrees, and overall, the economic scale of different degrees are about 1.25 to 2 times their extant situation. Due to the growth policy of the new universities in the past two decades, many small-scale universities have been established that still have a considerable capacity for quantitative and qualitative development. Investigating the economies of scale and scope indicates the existence of economies of scale in Iranian public universities; Accordingly, it can be concluded that the average cost of non-comprehensive universities is higher than that of comprehensive universities. Hence, the integration of universities is strongly advised to achieve economies of scale.